Ty. Just thought reperformance was used to test operating effectiveness of controls, hence a test of control. Does it belong to both categories of tests: test of controls and substantive procedures?
This was a very helpful video! One question I have is if you have a high control risk, but a low inherent risk or vice versa what does that do to substantive testing? I have had a simulation on a situation like this and I don't understand what happens to substantive testing if the RMM offsets each other. I'm hoping you can help, thank you!
If the control risk is high (weak internal control)you wouldn't be relying on the controls. Since you won't be relying on the controls, you will have to do more substantive testing. Even if the inherent risk is low, I can't imagine an auditor doing less work because of this. I could be wrong though so anyone can correct me.
@@HanYukiiilevel of risk associated with control itself doesn’t mean “weak internal control”. If control designed, implemented and operating effectively, you can rely on it
You're examples made it soo easy for me to understand. Thank you 🙏
Nice metaphor with stakes 🥩and fries 🍟
Thanks so much, I hope that simplified the concept a little bit!
Thank you for this video, it has really shined a bright light in my studies. Highly appreciated.🤝🙃
That's so nice of you! Thank you.
Well explained
Ty. Just thought reperformance was used to test operating effectiveness of controls, hence a test of control. Does it belong to both categories of tests: test of controls and substantive procedures?
I appreciate these explanations (by far the best I have heard on yt) so much. Thank you.
Great content, just need to slow down a little! Need time for it to sink in
This was a very helpful video! One question I have is if you have a high control risk, but a low inherent risk or vice versa what does that do to substantive testing? I have had a simulation on a situation like this and I don't understand what happens to substantive testing if the RMM offsets each other. I'm hoping you can help, thank you!
If the control risk is high (weak internal control)you wouldn't be relying on the controls. Since you won't be relying on the controls, you will have to do more substantive testing. Even if the inherent risk is low, I can't imagine an auditor doing less work because of this. I could be wrong though so anyone can correct me.
@@HanYukiiilevel of risk associated with control itself doesn’t mean “weak internal control”. If control designed, implemented and operating effectively, you can rely on it